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Attorney fees awarded in TheraMatrix lawsuit against Blues

There’s been another development in Pontiac-based TheraMatrix winning a $4.5 million lawsuit against Blue Cross Blue Shield of Michigan for breach of contract and tortious interference with economic and business relationships (“Their (Blue) Cross to bear,” Aug. 23, 2010).

According to Sara K. MacWilliams and Rodger D. Young, counsel for TheraMatrix:

[Avadenka] explained that the case was “most contentious” and that trial “was like a fencing match — thrust and parry by both sides, endlessly,” and therefore, substantial attorney hours were properly included in the fee award.

But, they continued:

Judge Avadenka’s opinion is of special note, because it examined what the proper source of evidence is to determine attorney fees in a Southeastern Michigan commercial litigation. Courts determining fee awards sometimes rely on the 2007 State Bar Survey of attorney rates.

However, as Michigan Lawyers Weekly recently reported, the survey is actually poor evidence of fees, both because it is now outdated, and because the survey has a very low response rate. Judge Avadenka recognized this, writing that the 2007 State Bar Survey is not “indicative of the true hourly rate in Southeastern Michigan for the attorneys who actually tried this case. There are over 35,000 attorneys in the State of Michigan, and the 2007 State Bar Survey reflects a questionnaire return rate of only 20-30 percent.”

Judge Avadenka, through his research, determined a more reasonable alternative, writing, “A truer representation of a reasonably hourly rate for the attorneys involved in the instant case is set forth in the National Law Survey (2008), which lists various rates by firm.”

Judge Avadenka also relied on “the Michigan Benchmark” as another source of evidence for determining fee awards. Using this evidence, Judge Avadenka set a reasonable billing rate of plaintiff’s lead counsel, Rodger Young, at $625 per hour during the applicable period, and adjusted at least one attorney’s billing rate up.

As we wrote last week, a USA Today story that also appears in the Detroit Free Press (both papers are owned by Gannett) also covered the TheraMatrix case. The Freep also published a story that talks about a recently filed U.S. Justice Department lawsuit against the Blues.